S&P 500 Futures advance after Obama says Bin Laden dead

U.S. stock futures rose after President Obama said Al Qaeda leader Osama bin Laden has been killed, almost 10 years after the Sept. 11 attacks that he orchestrated.

Standard & Poor's 500 index futures expiring in June climbed 0.8% to 1,371.10 at midnight New York time. The benchmark measure of U.S. shares closed at the highest level since June 2008 last week after rallying 8.4% in 2011.

Bin Laden, 54, was killed by the U.S. military in a mansion outside Islamabad, Obama said.

"I'm ecstatic," said Shawn Price, who manages $2.7 billion at Navellier & Associates Inc. in Reno. "It's a short-term positive across the board both for domestic and international export-oriented companies. We will get a broad relief rally because a world villain has been taken down. Whether it's a true or false sense of security, the average American will feel more safe now, feel better about the economy and the market."

Bin Laden used a family inheritance to build the global terrorist network that killed almost 3,000 people in the Sept. 11, 2001, attacks targeting New York and Washington. The Saudi-born bin Laden helped found Al Qaeda in 1988 after fighting Soviet troops in Afghanistan.

For the U.S. public, bin Laden was the face of terrorism. He appeared in videotapes threatening strikes against the West, including a message praising the Sept. 11 attacks as "divine blows" against America. The attacks with hijacked airliners prompted a national security initiative for commercial aviation that altered air travel. Al Qaeda has dispersed in the past decade. Still, bin Laden's demise may hamper the coordination of terrorist organizations and reduce recruitment by his network and other groups.

The S&P 500, the benchmark measure of U.S. shares, plunged 12% in five days after the 2001 attacks. The New York Stock Exchange didn't reopen until Sept. 17.

"The benefit from a global standpoint is that with that threat removed we can see the continuation of global growth without the threat of terrorism," said Walter "Bucky" Hellwig, who helps oversee $17 billion at BB&T Wealth Management in Birmingham, Ala. "The best case scenario is that Al Qaeda and some of the terrorist groups break up and become less effective, and in the worst case it encourages terrorists to step up their activities."

U.S. stocks rallied last week as earnings grew more than forecast and the Federal Reserve renewed its pledge to stimulate the economy. Goodyear Tire & Rubber Co., Merck & Co. and Caterpillar Inc. helped lead the week's advance, rising more than 5.4%, as they posted quarterly profit that beat analysts' forecasts. Boeing Co. gained 5.8% after its share-price estimate was raised at Citigroup Inc. Exelon Corp. offered to buy Constellation Energy Group Inc., driving the power producer up 10%.

The S&P 500 advanced 2% to 1,363.61 last week, rising four straight days in the longest winning streak since Feb. 8. The index rallied 2.9% in April. The Dow Jones industrial average rose 304.55 points, or 2.4%, to 12,810.54.

"Earnings have definitely been good, that is something tangible you can put your fingers on and say that it has been a positive for the market," said Walter Todd, who helps manage $950 million at Greenwood Capital Associates in Greenwood, S.C. The weekly advance is a result of "both earnings and the Fed. Bernanke gave a green light for the risk trade to continue."

The Dow Jones transportation average, considered a proxy for the economy, rose 4.2% to a record high of 5,514.87. The S&P 500 extended its year-to-date increase to 8.4% after 229 of 298, or 77%, of index companies reporting since April 11 beat the average analyst profit estimate. Equities also advanced after the Fed said a recent acceleration in inflation is probably temporary, signaling that the central bank doesn't feel an urgent need to raise borrowing costs.

Earnings per share are exceeding projections by 8.3% so far this season. Raw-material producers and financial companies are posting the best results, surpassing estimates by more than 13%. Eastman Chemical Co., the largest U.S. maker of plastics for water bottles, and Allstate Corp., the nation's largest publicly traded auto and home insurer, gained after beating analyst estimates, Bloomberg data show.